Makro is a modern food cash-and-carry company targeting professional food (Horeca) customers and end consumers. The current strategy is aimed at significantly increasing its customer base; providing a better shopping experience; and strengthening the company’s position as the most relevant partner for both target groups. With a presence in Argentina, Brazil, Colombia, and Venezuela, Makro operated 111 stores at the end of 2021.

2021 focused on growing store traffic and sales by shaping the product range around customer needs, and establishing competitive own-brand products to increase loyalty. New concept stores were also tested to offer an enhanced shopping experience based on technology and differentiated services.

E-commerce is growing quickly in the sector. The online grocery market is expected to develop further in the coming years, creating the need for digital sales channels. Delivery could become the main sales channel of the future, especially for Horeca. To maintain a competitive position, Makro accelerated the deployment of several new sales channels. The company also explored new partnerships with e-commerce platforms as important alternatives to store traffic and to enable delivery from stores; the implementation of ‘click & collect’ and ‘click & deliver’; and the development and improvement of its own online proposition.

The impact of COVID-19 was felt across all markets. Political instability, slow vaccination programmes, social tensions, and public protests all negatively affected operating conditions. Restrictions and limited store opening hours reduced store traffic and changed buying behavior. In the second half of the year, however, a rise in vaccination rates encouraged governments to carefully reduce social restrictions and support economic recovery. As always, the wellbeing of employees and customers remained a top priority for Makro, with a strict action plan supported by regular safety audits in all countries.

In Brazil, COVID-19 wasn’t the only challenge. Fierce competition from - and fast expansion by - the main players also dominated the market. The remodelling of São Paulo stores continued as part of the food cash-and-carry strategy, while in December the company concluded the sale of the stores outside the São Paulo region.

In Argentina, the negative impact of COVID-19 restrictions was sharpened by social, political, and economic instability as well as hyperinflation. Moreover, sales were also affected by government-set price controls aimed at reducing inflation and increasing consumption. With all these factors at play, the company focused on reducing operating costs, expanding the product range, increasing the proportion of own-brand and fresh-food, and improving the delivery process.

In Colombia, the economic and political environment remained relatively stable. Increasing vaccination rates led to a pick-up in the second half of the year driven by a rebound in commercial and industrial activity, higher domestic demand, and growing private and public consumption. A lifting of most COVID-19 restrictions and an increase in household consumption provided the retail business with a significant boost.

Venezuelan operating conditions have been challenging for some years due to the difficult political and humanitarian situation. The COVID-19 crisis only made matters worse and the deterioration of basic services continued. With distribution restricted and controlled by the government, the resulting impact on production and supply chains led to a scarcity of finished goods. One positive development was the alliance with Redvital - a provider of medicines and medical supplies and equipment. The partnership has shown promising results with a significant increase in sales following more traffic in the stores. So far, together with Redvital, four stores have been adapted to the new concept, with 15 more expected to follow in 2022.

Operational performance for Makro was severely impacted by continued COVID-19 related social restrictions leading to store closures and lower store traffic in all Makro countries. Market retraction in Brazil led to lower out-of-home consumption impacting both end consumer and Horeca sales, whereas Argentina was affected by hyperinflation and price controls. The sale of stores outside the São Paulo region made a significant contribution to the net results for 2021.

Digital channels

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